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Three months after Euro replaces Kuna two thirds of citizens support move

Written by  Apr 01, 2023

After the exchange of currencies, citizens' support for Croatia's entry into the Eurozone has increased, and it is expected that this support will continue to grow, Croatian National Bank (CNB) Governor Boris Vujčić said on Friday at the "90 days with the euro" panel.

Croatia became a member of the Eurozone at the beginning of this year and adopted the Euro as the official currency and ditched the Kuna.

The panel was organized by the Croatian Association of Alumni of the Faculty of Economics of the University of Zagreb, and Vujčić, who is also the president of that association, recalled the challenges that Croatia faced on the way to joining the Eurozone, such as the coronavirus pandemic, as well as the growth of inflation.

He also recalled the major logistical challenges of currency exchange, which included, among other things, the withdrawal of Kuna from circulation, the minting of euro coins with Croatian motifs, the distribution of euro banknotes and coins to businesses and citizens, as well as the transition of payment systems to the new currency.

Speaking about the effect of joining the Eurozone on inflation, Vujčić asserted that prices have risen, but not significantly. Inflation thus fell in January on an annual basis, but it fell by 0.4 percentage points less than it would have fallen if Croatia had not introduced the euro, and this was due to an "unusually strong" monthly increase in the prices of services, primarily in cafes, restaurants, hair salons, etc.

He also asserted that the vast majority of retail chains followed the rules on recalculation and rounding of prices. But, on the other hand, the public's perception is that inflation was much higher than it really was. "But that's always the case," said Vujčić.

After the successful replacement of the Kuna with the euro, the support of citizens for Croatia's entry into the Eurozone increased.

Thus, in an Ipsos survey in February of this year, when asked whether, generally speaking, they were personally "for" or "against" the introduction of the euro in Croatia, 63.5 percent of respondents answered "for".

Vujčić expects that this support will continue to grow, which is also the experience of other countries that introduced the euro. For example, with the Baltic countries, support for the Eurozone was below 50 percent before the introduction of the euro, and today it is above 80 percent, the governor noted.

The Voice of Dubrovnik


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